Webhosting evaluation BBB style: Bluehost and Dreamhost

I was happy to see that bluehost has improved since my last post and realized that BBB’s report is very handy way to persuade positive changes and benchmark service providers such as web hosting companies. Bluehost went from having 100% unresolved issues (3) to 66% (2) resolved and 1 no response within one month. They even increased their space/traffic offering while keep the same low price. Kudos to folks at bluehost.

Since I was on BBB web site reviewing bluehost’s report, I also did a quick search on Dreamhost. Their report certainly raise concerns. By comparison, bluehost’s report doesn’t look as severe. The bottom line is that both companies respond to complaints, which is a quality that you can observe from their BBB reports.
Based on what I observed so far, both companies will most likly continue to increase their web space/traffic quota over time. Considering that their space/traffic offering are significantly larger than most average users, therefore most people do not need to worry about their space/traffic limits. Even one of my friends, who use his web space to store linux distribution binaries, only using about 15% of his quota. If you think that you might use all 50GB of space or 999GB of traffic in one or two years when your web site becomes so popular, the web hosting company either will increase the quota before you reach quota or you might already getting enough ad revenue from all that traffic to pay for a service upgrade. So, size what you need today rather than next year.

The only limiting factor in such shared hosting could be CPU resources. You probably don’t really have to worry about it until the service provider notifies you.

If you read Dreamhost’s offering, you will see a line that says “Automatically Increase Weekly By:” Some people really buys into such offer. They also allows their customers to generate coupon codes to attract more new customers. These certainly are cleaver marketing and seems generated enough demand that cause their service to suffer, which is also reflected in their BBB reports. I can understand these are only a few bad apples when comparing to the number of customers they service. However, bad publicity can have far more significant impact on their corporate brand/image than good publicity.

If you look from web hosting companies’ point of view, they have to increase their top-line, which is defined by number of subscribers and revenue per subscriber. They also have to manage their bottom-line, by matching their data center/staff capacity to the customer demands. If they have over capacity, then they are not acquiring customers fast enough. This means that they are loosing money on investments. If they have under capacity, then they are not meeting the demand fast enough. This can lead to bad user experiences and bad publicity mentioned above. They have to execute in a balanced way that will promote long-term growth.

One way that web hosting companies can do to meet spikes in customer demand before they build up their capacity is to tap into utility computing resources from third parties. This may require establishment of a business partnership.

From a customer point of view, the hosting provider that can best execute on meeting customer needs will have better competitive advantages. So, keep your eyes on BBB reports or any other similar reporting systems you can find.